Is Intellectual Property Ready for Blockchain?
This post is one of a series of posts on Blockchain.
Sep 2, 2021
With its relatively low maintenance cost, increased transparency, reduced administrative burden, and resilience to fraud, blockchain is a versatile technology deployed in many sectors and businesses. So, what is blockchain, and could this disruptive technology have any application for managing intellectual property (IP) rights such as patents, copyrights, trademarks, industrial designs, and more?
Photo credit: Unsplash, Markus Spiske
Blockchain technology is a way of creating a shared database that can record and track transactions and assets. In theory, blockchain could be used to create and maintain any database or ledger, and since one single user does not govern blockchain, a centralized version of the ledger does not exist. Instead, it can be widely accessible to the public or large groups, depending on the permissions granted. The chain is updated with each transaction so that users can see the chronological activity for that particular blockchain. Once something is on the database, it cannot be removed.
“Blockchaining” Intellectual Property
While it is difficult to predict all potential IP-related applications of blockchain, I see three specific fields of application pertinent to technology transfer and IP professionals.
1. Blockchain can help with IP rights management and technology transfer and commercialization practices
Blockchain could be used by inventors looking to find potential investors while at the same time safeguarding their inventions. A ledger might consist of a short description of the character and goal of the invention, while those wishing to gain access to more information on how the invention works would then have to accept the provisions of a “smart contract”. Or blockchain could be utilized by patent holders wishing to find potential licensees for related know-how and trade secrets in addition to the patented invention.
Inventors might be interested in publishing their technological developments to preserve the novelty of the inventions and guarantee their freedom to operate. Thus, blockchain technology will be able to facilitate the management of IP rights. Publications under a blockchain environment might be used as evidence in IP-related law proceedings.
2. Blockchain as an IP registry
Blockchain can also serve as a technology-based IP registry where IP owners can keep hashed digital certificates of their IP and use the platform to get royalties from those who use their creations and inventions using smart contracts.
Often, the approval wait times of patent agencies and other regulatory bodies are long. This delay can hamper the first-mover advantage in many industries where incumbents must act fast to protect their inventions and stay at the top of the game. By replacing centralized registration systems with decentralized ones, it will be easier to register new IP and update filings and transfer ownership at any time. With blockchain, regulatory agencies will be able to achieve more with fewer resources.
3. Determining creatorship, proof of ownership, and origin of creative works
Blockchain can be used to catalog and store original works. Often, there are no adequate means for authors to catalog their works and copyright ownership can be hard to prove. It can also be difficult for authors to see who is using their work, and it is equally difficult for third parties to know from whom to seek a license. Authors are often unable to stop infringements or to monetize their works successfully. With blockchain, copyrights need not be registered and can come into existence automatically upon the creation of original qualifying work.
Another major problem with IP rights management is tracing a complete chain of ownership. It is often challenging to draw a line between getting inspired by another musician’s work and stealing it. Notorious copyright cases in music history show that determining creatorship and copyright ownership is often “mission impossible.” Blockchain can solve these system imperfections. For example, blockchain-based platforms such as Binded allow authors to record copyright ownership, which can then be utilized to see where and how the work is being used on the internet and to seek licenses from third parties. Binded blends integrations with the U.S. Copyright Office, Instagram, and Twitter to monitor how copyrighted images are used. Registering a work via Binded provides a digital certificate of authenticity. This registration can help third parties identify the author of a work and help IP owners to tackle infringements. Currently, IP owners have difficulties protecting the IP works online, i.e., once the IP work is uploaded on the internet, it becomes difficult to maintain control of that work and monitor who is using it for what purpose.
When the IP work is registered and verified using blockchain-based platforms, authors can search across a whole host of different sources simultaneously to ascertain who is using their work. This enables IP owners to identify and stop infringements and makes it easier to license their IP works. In this sense, blockchain can serve as an enforcement tool. With a blockchain-based registration system, verifying whether a new song is or isn’t infringing upon the existing IP of a previously registered song will be much simpler. This type of blockchain-based detection system can be applied to text, art, and music with the help of artificial intelligence.
Photo credit: Unsplash, Rupixen.com
Using Blockchain for Micropayments and Licensing Via Smart Contracts
Blockchain and smart contracts can be used for licensing IP works by reducing the cost of transactions and creating a direct link between authors/inventors and users. A smart contract is a computer program code that can facilitate, execute, and enforce a contract by itself. The contractual terms are pre-programmed, which reduces the administrative burden and cost. Using smart contracts, IP licenses can be self-executing upon the use of a work.
Smart contracts can also be used for micropayments for the use of content. The author could assign a Bitcoin address to an IP work, allowing the user to make a micropayment to the author in return for using the work. This system can eliminate the need for financial intermediaries and thus enable the author to be remunerated without paying the high transactions costs. The system also introduces simplicity and transparency in IP-related transactions.
The Mycelia project is a research and development hub for music makers. Its Creative Passport is the digital container for verified profile information, IDs, acknowledgments, works, business partners, and payment mechanisms for all music makers. It aims to become a digital identity standard for music makers, collectively forming the Creative Passport Database and evolving into the essential connective hub for all music-related services. Using blockchain, featuring template smart contracts, Creative Passport will enable quick and easy direct payments to simplify and democratize collaboration from meaningful commercial partnerships to creativity.
Access to the Creative Passport Database comes in the form of a subscription service for businesses that wish to link in and take advantage of its rich data or market their service to the Creative Passport holders. Profits will go towards the upkeep of the Creative Passport service and the Creative Passport holders. Project Mycelia is currently alpha-testing the Creative Passport App. Still in its infancy, the project’s goal is to use blockchain as a platform for hosting immutable metadata about songs, the artists who recorded them, and who is listening to them. This will enable peer-to-peer payments and restore more equity in songs to the artists, engineers, and producers who made them.
Other artists have also used blockchain as a platform for the management of their IP rights. Singer Bjork partnered with the blockchain startup Blockpool, which collaborates with the label, One Little Indian, on a crypto-checkout plugin for the online store. The platform has enabled Bjork’s album “Utopia” pre-orders to be processed using Bitcoin, AudioCoin, Litecoin, and Dashcoin cryptocurrencies. Each fan received 100 AudioCoins as a reward for pre-ordering the album, deposited into an e-wallet.
The Way Forward
These examples demonstrate how IP owners can use blockchain platforms to control better and exploit their IP works, improve collaboration, and achieve fair and efficient remuneration. This could have a massive impact on IP rights management in the digital environment by making the process more transparent and efficient and cutting out financial intermediaries.
Even though the idea of creating a more efficient blockchain-based system for the management and monetization of IP rights is still new, novel blockchain-based applications for the management of IP rights continue to appear with remarkable frequency. However, many issues remain unresolved, such as the required processing power of blockchains, compatibility, and interoperability of different blockchain platforms, and legal issues such as data ownership, privacy, liability, and jurisdiction.